1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [ X ] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the Fiscal Year ended December 31, 1998 [ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the Transition Period from to WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN (Full Title of the Plan) WYMAN-GORDON COMPANY 244 WORCESTER STREET P.O. BOX 8001 NORTH GRAFTON, MASSACHUSETTS 01536-8001 (Name of Issuer of the Securities Held Pursuant to the Plan and the Address of its Principal Executive Offices) 1 of 3 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Committee of Wyman-Gordon Company has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized. WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Date: 6/30/99 By: /S/DAVID J. SULZBACH David J. Sulzbach Vice President - Finance and Corporate Controller -2- 3 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Financial Statements and Schedules December 31, 1998 and 1997 (With Independent Auditors' Report) -3- 4 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN TABLE OF CONTENTS PAGE Independent Auditors' Report R-2 Independent Auditors' Consent R-3 Statements of Net Assets Available for Benefits R-4 Statements of Changes in Net Assets Available for Benefits R-5A - R-5B Notes to Financial Statements R-6 - R-18 Schedule 1 - Schedule of Assets Held for Investment Purposes R-19 - R-19A Schedule 2 - Schedule of Reportable Transactions R-20 - R-20A R-1 5 INDEPENDENT AUDITORS' REPORT To The Trustees of Wyman-Gordon Company Savings/Investment Plan We have audited the accompanying statements of net assets available for benefits of the Wyman-Gordon Company Savings/Investment Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Wyman-Gordon Company Savings/Investment Plan as of December 31, 1998 and 1997, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /S/MOTTLE McGRATH BRANEY & FLYNN, P.C. Mottle McGrath Braney & Flynn, P.C. Worcester, Massachusetts June 28, 1999 R-2 6 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-26980) pertaining to the Wyman-Gordon Company Savings/Investment Plan of our report dated June 28, 1999, with respect to the financial statements and schedules of the Wyman-Gordon Company Savings/Investment Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1998. /S/MOTTLE McGRATH BRANEY & FLYNN, P.C. Mottle McGrath Braney & Flynn, P.C. Worcester, Massachusetts June 28, 1999 R-3 7 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statements of Net Assets Available for Benefits December 31, 1998 and 1997 1998 1997 ASSETS Investments, at fair value: Collective Investment Funds: AIM Constellation $ 2,925,399 $ 2,497,109 Merrill Lynch - Income Accumulation 22,051,843 20,877,997 MasterWorks-LifePath 2000 1,071,110 1,199,518 MasterWorks-LifePath 2010 1,668,434 1,226,481 MasterWorks-LifePath 2020 1,722,786 1,329,460 MasterWorks-LifePath 2030 683,194 539,543 MasterWorks-LifePath 2040 1,480,643 821,495 Neuberger & Berman Guardian Trust 1,672,347 1,695,431 Norwest Large Company Growth Fund 8,746,000 - Templeton Foreign (I) 824,499 1,015,875 MasterWorks-Asset Allocation 14,729,207 11,257,089 MasterWorks-Bond Index 6,624,220 5,641,628 MasterWorks-Growth Stock - 9,121,968 MasterWorks-S&P 500 Stock 29,138,483 22,275,400 93,338,165 79,498,994 Wyman-Gordon Stock 16,323,173 21,815,355 Cooper Common Stock - 1,086,473 Cooper Cameron Common Stock - 84,392 Participant Loans 3,250,277 2,934,289 Total assets $112,911,615 $105,419,503 Net assets available for benefits $112,911,615 $105,419,503 See accompanying notes to financial statements. R-4 8 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 1998 MERRILL LYNCH MASTER- MASTER- AIM INCOME WORKS WORKS CONSTEL- ACCUMU- LIFEPATH LIFEPATH LATION LATION 2000 2010 ADDITIONS Contributions: Employee $ 515,662 $ 1,479,148 $ 82,672 $ 203,167 Employer - - - - 515,662 1,479,148 82,672 203,167 Interest and dividends 70,355 1,274,872 71,004 108,655 Net appreciation (depreciation) in fair value of investments 377,436 - 36,088 101,460 Total additions 963,453 2,754,020 189,764 413,282 DEDUCTIONS Participants' withdrawals (174,223) (2,523,231) (197,733) (33,085) Plan administrative expenses (4,163) (30,338) (723) (1,746) Net transfers in (out) (356,777) 973,395 (119,716) 63,502 Total (deductions) additions (535,163) (1,580,174) (318,172) 28,671 Increase(decrease) in net assets available for benefits 428,290 1,173,846 (128,408) 441,953 Net assets available for benefits: Beginning of year 2,497,109 20,877,997 1,199,518 1,226,481 End of year $2,925,399 $22,051,843 $ 1,071,110 $ 1,668,434 See accompanying notes to financial statements. R-5A1 9 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits (continued) Year Ended December 31, 1998 MASTER- MASTER- MASTER- NEUBERGER WORKS WORKS WORKS & BERMAN LIFEPATH LIFEPATH LIFEPATH GUARDIAN 2020 2030 2040 TRUST ADDITIONS Contributions: Employee $ 224,379 $ 133,851 $ 253,436 $ 293,049 Employer - - - - 224,379 133,851 253,436 293,049 Interest and dividends 119,906 39,401 89,950 146,897 Net appreciation (depreciation) in fair value of investments 138,587 90,462 161,999 (120,856) Total additions 482,872 263,714 505,385 319,090 DEDUCTIONS Participants' withdrawals (13,774) (33,100) (120,295) (88,899) Plan administrative expenses (2,216) (1,668) (2,212) (2,233) Net transfers in (out) (73,556) (85,295) 276,270 (251,042) Total (deductions) additions (89,546) (120,063) 153,763 (342,174) Increase(decrease) in net assets available for benefits 393,326 143,651 659,148 (23,084) Net assets available for benefits: Beginning of year 1,329,460 539,543 821,495 1,695,431 End of year $1,722,786 $ 683,194 $ 1,480,643 $ 1,672,347 See accompanying notes to financial statements. R-5A2 10 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits (continued) Year Ended December 31, 1998 NORWEST MASTER- MASTER- LARGE WORKS WORKS COMPANY TEMPLETON ASSET BOND GROWTH FOREIGN(I) ALLOCATION INDEX ADDITIONS Contributions: Employee $ 71,675 $ 194,841 $ 1,166,237 $ 408,265 Employer - - - - 71,675 194,841 1,166,237 408,265 Interest and dividends - 84,276 1,651,523 389,645 Net appreciation (depreciation) in fair value of investments 766,769 (137,562) 1,253,441 164,732 Total additions 838,444 141,555 4,071,201 962,642 DEDUCTIONS Participants' withdrawals (5,059) (82,096) (926,398) (247,947) Plan administrative expenses (999) (1,237) (10,861) (5,660) Net transfers in (out) 7,913,614 (249,598) 338,176 273,557 Total (deductions) additions 7,907,556 (332,931) (599,083) 19,950 Increase(decrease) in net assets available for benefits 8,746,000 (191,376) 3,472,118 982,592 Net assets available for benefits: Beginning of year - 1,015,875 11,257,089 5,641,628 End of year $8,746,000 $ 824,499 $14,729,207 $ 6,624,220 See accompanying notes to financial statements. R-5A3 11 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits (continued) Year Ended December 31, 1998 MASTER- MASTER- WORKS WORKS WYMAN- COOPER GROWTH S&P 500 GORDON COMMON STOCK STOCK STOCK STOCK ADDITIONS Contributions: Employee $ 1,155,118 $ 2,922,752 $ 1,351,258 $ - Employer - - 2,608,012 - 1,155,118 2,922,752 3,959,270 - Interest and dividends 1,763,585 1,686,744 - - Net appreciation (depreciation) in fair value of investments (1,757,059) 4,581,973 (11,576,180) 45,133 Total additions 1,161,644 9,191,469 (7,616,910) 45,133 DEDUCTIONS Participants' withdrawals (460,244) (1,424,676) (883,915) (17,909) Plan administrative expenses (10,408) (26,473) (22,216) - Net transfers in (out) (9,812,960) (877,237) 3,030,859 (1,113,697) Total (deductions) additions (10,283,612) (2,328,386) 2,124,728 (1,131,606) Increase(decrease) in net assets available for benefits (9,121,968) 6,863,083 (5,492,182) (1,086,473) Net assets available for benefits: Beginning of year 9,121,968 22,275,400 21,815,355 1,086,473 End of year $ - $29,138,483 $16,323,173 $ - See accompanying notes to financial statements. R-5A4 12 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits (continued) Year Ended December 31, 1998 COOPER CAMERON COMMON COOPER PARTICIPANT PLAN STOCK DEBENTURE LOANS TOTALS ADDITIONS Contributions: Employee $ - $ - $ - $ 10,455,510 Employer - - - 2,608,012 - - - 13,063,522 Interest and dividends - - 351,659 7,848,472 Net appreciation (depreciation) in fair value of investments (29,280) - - (5,902,857) Total additions (29,280) - 351,659 15,009,137 DEDUCTIONS Participants' withdrawals - - (161,288) (7,393,872) Plan administrative expenses - - - (123,153) Net transfers in (out) (55,112) - 125,617 - Total (deductions) additions (55,112) - (35,671) (7,517,025) Increase(decrease) in net assets available for benefits (84,392) - 315,988 7,492,112 Net assets available for benefits: Beginning of year 84,392 - 2,934,289 105,419,503 End of year $ - $ - $ 3,250,277 $112,911,615 See accompanying notes to financial statements. R-5A5 13 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 1997 MERRILL LYNCH MASTER- MASTER- AIM INCOME WORKS WORKS CONSTEL- ACCUMU- LIFEPATH LIFEPATH LATION LATION 2000 2010 ADDITIONS Contributions: Employee $ 444,244 $ 1,473,989 $ 142,080 $ 181,275 Employer - - - - 444,244 1,473,989 142,080 181,275 Interest and dividends 191,170 1,293,199 70,566 75,887 Net appreciation (depreciation) in fair value of investments 19,980 - 29,861 116,311 Total additions 655,394 2,767,188 242,507 373,473 DEDUCTIONS Participants' withdrawals (210,789) (1,631,745) (49,854) (80,831) Plan administrative expenses (3,381) (52,041) (441) (1,138) Net transfers in (out) (42,431) (415,049) 223,639 (329,175) Total (deductions) additions (256,601) (2,098,835) 173,344 (411,144) Increase(decrease) in net assets available for benefits 398,793 668,353 415,851 (37,671) Net assets available for benefits: Beginning of year 2,098,316 20,209,644 783,667 1,264,152 End of year $2,497,109 $20,877,997 $ 1,199,518 $ 1,226,481 See accompanying notes to financial statements. R-5B1 14 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits (continued) Year Ended December 31, 1997 MASTER- MASTER- MASTER- NEUBERGER WORKS WORKS WORKS & BERMAN LIFEPATH LIFEPATH LIFEPATH GUARDIAN 2020 2030 2040 TRUST ADDITIONS Contributions: Employee $ 237,986 $ 93,014 $ 107,990 $ 242,280 Employer - - - - 237,986 93,014 107,990 242,280 Interest and dividends 72,190 21,241 41,338 121,327 Net appreciation (depreciation) in fair value of investments 164,211 65,782 46,750 43,793 Total additions 474,387 180,037 196,078 407,400 DEDUCTIONS Participants' withdrawals (14,766) (1,084) (13,451) (17,786) Plan administrative expenses (1,255) (809) (940) (1,762) Net transfers in (out) (157,677) 117,596 454,998 459,275 Total (deductions) additions (173,698) 115,703 440,607 439,727 Increase(decrease) in net assets available for benefits 300,689 295,740 636,685 847,127 Net assets available for benefits: Beginning of year 1,028,771 243,803 184,810 848,304 End of year $1,329,460 $ 539,543 $ 821,495 $ 1,695,431 See accompanying notes to financial statements. R-5B2 15 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits (continued) Year Ended December 31, 1997 NORWEST MASTER- MASTER- LARGE WORKS WORKS COMPANY TEMPLETON ASSET BOND GROWTH FOREIGN(I) ALLOCATION INDEX ADDITIONS Contributions: Employee $ - $ 186,292 $ 780,113 $ 359,758 Employer - - - - - 186,292 780,113 359,758 Interest and dividends - 106,553 1,409,211 350,754 Net appreciation (depreciation) in fair value of investments - (70,739) 670,121 139,198 Total additions - 222,106 2,859,445 849,710 DEDUCTIONS Participants' withdrawals - (34,290) (776,425) (269,415) Plan administrative expenses - (1,115) (10,071) (4,853) Net transfers in (out) - 215,735 (359,935) (16,725) Total (deductions) additions - 180,330 (1,146,431) (290,993) Increase(decrease) in net assets available for benefits - 402,436 1,713,014 558,717 Net assets available for benefits: Beginning of year - 613,439 9,544,075 5,082,911 End of year $ - $ 1,015,875 $11,257,089 $ 5,641,628 See accompanying notes to financial statements. R-5B3 16 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits (continued) Year Ended December 31, 1997 MASTER- MASTER- WORKS WORKS WYMAN- COOPER GROWTH S&P 500 GORDON COMMON STOCK STOCK STOCK STOCK ADDITIONS Contributions: Employee $ 1,306,203 $ 2,187,443 $ 1,122,199 $ - Employer - - 2,322,047 - 1,306,203 2,187,443 3,444,246 - Interest and dividends 717,728 785,937 - - Net appreciation (depreciation) in fair value of investments (394,202) 4,606,782 (2,277,945) 192,361 Total additions 1,629,729 7,580,162 1,166,301 192,361 DEDUCTIONS Participants' withdrawals (771,842) (1,176,550) (669,498) (19,653) Plan administrative expenses (11,924) (21,264) (27,527) - Net transfers in (out) (2,219,751) (112,552) 3,056,088 (129,427) Total (deductions) additions (3,003,517) (1,310,366) 2,359,063 (149,080) Increase(decrease) in net assets available for benefits (1,373,788) 6,269,796 3,525,364 43,281 Net assets available for benefits: Beginning of year 10,495,756 16,005,604 18,289,991 1,043,192 End of year $ 9,121,968 $22,275,400 $21,815,355 $ 1,086,473 See accompanying notes to financial statements. R-5B4 17 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN Statement of Changes in Net Assets Available for Benefits (continued) Year Ended December 31, 1997 COOPER CAMERON COMMON COOPER PARTICIPANT PLAN STOCK DEBENTURE LOANS TOTALS ADDITIONS Contributions: Employee $ - $ - $ - $ 8,864,866 Employer - - - 2,322,047 - - - 11,186,913 Interest and dividends - - 265,941 5,523,042 Net appreciation (depreciation) in fair value of investments 26,974 21,970 - 3,401,208 Total additions 26,974 21,970 265,941 20,111,163 DEDUCTIONS Participants' withdrawals (3,516) (50,014) (46,147) (5,837,656) Plan administrative expenses - (113) - (138,634) Net transfers in (out) (41,500) (1,052,017) 348,908 - Total (deductions) additions (45,016) (1,102,144) 302,761 (5,976,290) Increase(decrease) in net assets available for benefits (18,042) (1,080,174) 568,702 14,134,873 Net assets available for benefits: Beginning of year 102,434 1,080,174 2,365,587 91,284,630 End of year $ 84,392 $ - $ 2,934,289 $105,419,503 See accompanying notes to financial statements. R-5B5 18 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION The Wyman-Gordon Company Savings/Investment Plan ("the Plan") is a single employer defined contribution plan covering certain employees of Wyman-Gordon Company ("the Company"). The Plan was established on January 1, 1981 for the purpose of providing eligible employees with opportunities for (1) convenient and regular personal savings; (2) sharing in contributions by the Company out of its current and accumulated net profits; and (3) supplementing retirement benefits. The Plan is a contributory plan which is funded by a trust arrangement with the Wyman-Gordon Savings/Investment Trust (the "Trust"). The above description of the Plan is provided for general information purposes only. Participants should refer to the Plan document for more complete information. (a) ADMINISTRATION OF THE PLAN The Plan is administered jointly by a Plan Committee and a Plan Investment Committee, both of whose members are appointed by the Company's Chief Executive Officer. The Plan committees are responsible for the promulgation and enforcement of necessary or appropriate rules and regulations for the administration of the Plan, the interpretation of the terms of the Plan, the resolution of questions relating to an individual's participation in the Plan and the determination of investments for the participants to select as their investment alternatives. (b) ELIGIBILITY All employees of the Company are eligible to participate in the Plan except any employee who is covered by a collective bargaining agreement which does not specifically call for their participation in this Plan. Participation can begin after a maximum of three months service. (c) FEDERAL INCOME TAXES The Internal Revenue Service (IRS) has determined and informed the Company by letter dated April 24, 1997, that the Plan and related Trust are designed in accordance with Section 401 of the Internal Revenue Code (IRC). The Plan has been amended since receiving its determination letter. The Company believes that the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC. Accordingly, no provision for taxes is necessary since the Trust has been determined to be exempt from taxation under Section 501 of the IRC. R-6 19 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (d) EMPLOYEE CONTRIBUTIONS Upon becoming participants, eligible employees may elect to reduce their compensation between 1% and 15% and have such amount contributed to the Plan by the employer as a pre-tax contribution. With regard to a participant who is a Wyman-Gordon Forgings, Inc. (WGFI), a subsidiary of the Company, hourly employee, 20% is the maximum contribution. The election shall be made in advance as a whole percentage of compensation. Additionally, an eligible employee may elect to make after-tax contributions to the Plan subject to the percentage limitations discussed above. In addition, in no event shall the contributions made by or on behalf of a participant for a Plan year exceed certain limitations as required by the Employee Retirement Income Security Act of 1974 (ERISA). The IRC also includes provisions which limit the amount of employer contributions which may be made on behalf of any individual participant. (e) COMPANY CONTRIBUTIONS Currently, the Company matches 50% of each participant's quarterly contributions to the Plan with Company stock. Amounts eligible for the 50% stock match are limited to 5% of the participant's salary. The employer may change the 50% matching rate or the 5% of considered pay to any other percentages including 0%. The Company stock match amounted to $2,608,012 and $2,322,047 in 1998 and 1997, respectively. For employees covered by the Labor Agreement with the United Steelworkers of America, Local 2285, subject to the attainment of performance goals for each quarter of the fiscal year, the Company will make Stock Bonus Contributions on behalf of each Participant. The Stock Bonus Contributions for each period are allocated among eligible participants in an equal dollar amount, up to a maximum of $0.25 for each hour worked up to a maximum of 40 hours worked per week. The dollar amount is determined based on the percentage attainment of the predetermined published quarterly performance goal. Such amount is zero if the percentage attainment of such goal is less than 90% and is 90% of the $0.25 (the maximum dollar amount) if the percentage attainment is equal to 90%. For each incremental percentage in excess of 90%, the dollar amount is increased. R-7 20 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (e) COMPANY CONTRIBUTIONS, (continued) The Company is required to make each period's stock bonus contribution in cash or in Company stock. If the employer elects to make the period's stock bonus contribution in Company stock, the number of shares of Company stock to be contributed will be determined by dividing the dollar amount of the stock bonus contribution for the period by the average price of one share of Company stock during the period. (f) PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution and allocation of the Company's contribution, Plan earnings, and forfeitures of terminated participants nonvested accounts. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. (g) INVESTMENT FUNDS Effective as of July 1, 1994, assets from the Cooper Industries, Inc. Savings and Stock Ownership Plan and the Cameron Iron Works, USA, Inc. Savings Investment Plan for Hourly Employees attributable to participants who prior to May 27, 1994, were employees of Cameron Forged Products Company and who on May 27, 1994 became employees of WGFI were transferred to this Plan. The assets included Cooper Common Stock and Cooper Preferred Stock which were held in the Cooper Common Stock Fund and Cooper Preferred Stock Fund, respectively. A participant's or beneficiary's existing investment in the Cooper Common Stock Fund and the Cooper Preferred Stock Fund as of July 1, 1994 and earnings thereon may continue to be invested in such funds until such time as the participant or beneficiary otherwise elects to invest such portion of their account or the Administrator directs the liquidation of such funds. The Cooper Common Stock Fund and the Cooper Preferred Stock Fund are not designated as available for investment by participants or beneficiaries, except to the extent a participant or beneficiary is permitted to exchange all or a portion of their investment in the Cooper Preferred Stock Fund for an equivalent investment in the Cooper Common Stock Fund. R-8 21 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (g) INVESTMENT FUNDS (continued) On August 29, 1997, the MasterWorks Division of Barclays Global Investors, N.A., (BGI), a wholly-owned subsidiary of Barclays Bank PLC, was sold to Merrill Lynch, Pierce, Fenner & Smith Inc. ("Merrill Lynch"). MasterWorks is currently operated as a separate component of Merrill Lynch Group Employee Services, a division of Merrill Lynch. In conjunction with the MasterWorks sale, BGI remained as trustee of all MasterWorks plans through December 31, 1997, but delegated to Merrill Lynch, beginning August 30, 1997, all duties and functions required of BGI as a trustee of a MasterWorks client. Clients were provided documentation and appointed Merrill Lynch Trust Company FSB successor trustee of their plans effective January 1, 1998. BGI had no responsibility for and no involvement with MasterWorks activities after August 29, 1997 (except to the extent BGI acted as trustee, as described above, or that MasterWorks clients participated in BGI's managed investments or BGI performed fund accounting services). Participants in the Plan have the following 14 investment funds available as of December 31, 1998: AIM Constellation Fund - aggressively seeks to increase shareholders' capital by investing principally in common stocks, with emphasis on medium-sized and smaller emerging growth companies. Management of the fund will be particularly interested in companies that are likely to benefit from new or innovative products, services or processes that should enhance such companies' prospects for future growth in earnings. Merrill Lynch Income Accumulation Fund - invests in a mix of fixed-rate and variable-rate securities with strong credit ratings. The fund diversifies its investment by limiting its holdings of any one issuer to 10% of the fund assets at the time of purchase. This limitation does not apply to the U.S. Government or its agencies. Between 25% and 50% of the fund is held in publicly traded instruments. R-9 22 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (g) INVESTMENT FUNDS (continued) MASTERWORKS LIFEPATH FUNDS Each LifePath Fund seeks to provide long-term investors with an asset allocation strategy designed to maximize assets for retirement or for other purposes consistent with the quantitatively measured risk investors, on average, may be willing to accept given their investment time horizon. Specifically: LifePath 2000 Fund - is managed for investors planning to retire (or begin to withdraw substantial portions of their investment) approximately in the year 2000. LifePath 2010 Fund - is managed for investors planning to retire (or begin to withdraw substantial portions of their investment) approximately in the year 2010. LifePath 2020 Fund - is managed for investors planning to retire (or begin to withdraw substantial portions of their investment) approximately in the year 2020. LifePath 2030 Fund - is managed for investors planning to retire (or begin to withdraw substantial portions of their investment) approximately in the year 2030. LifePath 2040 Fund - is managed for investors planning to retire (or begin to withdraw substantial portions of their investment) approximately in the year 2040. NEUBERGER & BERMAN GUARDIAN TRUST - is a growth and income fund that emphasizes investments in stocks of established, high-quality companies considered to be undervalued in comparison to stocks of similar companies. NORWEST LARGE COMPANY GROWTH FUND - seeks to provide long-term capital appreciation through investment primarily in large, high-quality, domestic, dynamic growth companies whose earnings are expected to grow 50% faster than the market, as measured by the earnings of the S&P 500 Stock Index. R-10 23 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (g) INVESTMENT FUNDS (continued) TEMPLETON FOREIGN FUND - CLASS I - seeks to achieve long-term capital growth through a flexible policy of investing in stocks and debt obligations of companies and governments outside the United Stares. MASTERWORKS ASSET ALLOCATION FUND - seeks to achieve superior long-term gains at reasonable risk by actively shifting investments among common stocks, U.S. Treasury Bonds and money market instruments. The investment strategy of the Asset Allocation Fund focuses on the relative attractiveness of asset classes at given points in time. The fund uses a computerized portfolio selection model to determine the optimum mix among stocks, bonds and money market instruments. MASTERWORKS BOND INDEX FUND - seeks to approximate, as closely as practicable before fees and expenses, the total rate of return of the U.S. market for issued and outstanding U.S. Government and high- grade corporate bonds as measured by the Lehman Brothers Government/Corporate Bond Index (the LB Bond Index). The fund seeks to achieve its investment objective by investing all of its assets in the Master Series, which has substantially the same investment objective as the Fund. The Master Series seeks to achieve its objective by investing substantially all of its assets in securities included in the LB Bond Index, which is composed of approximately 5,000 issues of fixed income securities, including U.S. Government securities and investment grade corporate bonds, each with an outstanding market value of at least $25 million and remaining maturity of greater than one year. MASTERWORKS S&P 500 STOCK FUND - seeks to achieve the same total rate of return as the S&P 500 Index. The S&P 500 Stock Fund invests in the same stocks and in substantially the same percentages as the S&P 500 Index. The stocks included in the fund represent those held by the Index itself and do not reflect subjective options concerning individual companies or industries. R-11 24 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (g) INVESTMENT FUNDS (continued) WYMAN-GORDON STOCK FUND - invests in the common stock of the Company, the plan sponsor. Amounts contributed to the Wyman-Gordon Stock Fund may be temporarily invested in other short-term investments pending the purchase of Company stock. This fund is subject to a relatively high degree of risk because it is not a diversified investment and is subject to any potential volatility in the price of the Company's common stock. In April 1998, the Administrative Committee elected to terminate the Cooper Common Stock Fund and the Cooper Cameron Common Stock Fund on December 31, 1998. All participants in these funds had the option to transfer their investment in these two funds to any funds of their choice between April and December 31, 1998. All remaining shares in these two funds on December 31, 1998 were liquidated by Merrill Lynch and transferred to the Merrill Lynch Income Accumulation Fund as of January 1, 1999. In 1997, Cooper called the entire issue of the convertible, subordinate debentures for redemption. All debentures were sold at a value of $1,185 per $1,000 face value of bonds held on May 21, 1997. Upon completion of the sale of all debentures the Cooper Debenture Fund was terminated and all assets were transferred to the Merrill Lynch Income Accumulation Fund. (h) DISTRIBUTIONS OF BENEFITS Participants (or their beneficiaries in the case of their death) may elect to have their vested account balance paid to them following their termination of employment with the Company, by submitting a completed distribution election form to the Plan Administrator. Participants who are WGFI hourly employees must be paid in the form of a single lump sum. Notwithstanding, if they are a WGFI hourly employee at the time they are required by law to commence distribution, or anytime thereafter, they may instead elect to be paid annually in a lump sum in an amount sufficient to comply with Code Section 401(a)(9). R-12 25 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (h) DISTRIBUTIONS OF BENEFITS (continued) Participants, other than participants who are WGFI Hourly Employees, may elect to be paid in any of these forms: (a) a single lump sum, or (b) a portion paid in a lump sum, and the remainder paid later, or (c) periodic installments over a period not to exceed the life expectancy of the participants and their beneficiaries. Distributions must be made in cash, except to the extent of the distribution of any participant outstanding loan balance, if any and except (if the account is distributed in a lump sum) to the extent a participant elects payment in the form of whole shares of Company Stock, Cooper Common Stock and Cooper Cameron Stock and cash in lieu of fractional shares to the extent invested in the Company Stock Fund, Cooper Common Stock Fund and Cooper Cameron Common Stock Fund. (i) VESTING Participants are fully vested in contributions made by employees and certain employer contributions. Participants become fully vested in their Company Stock Match Account if (1) their hire date is on or before April 1, 1993 and they were an employee of the Company on April 1, 1993 or (2) they were employed by WGFI on May 27, 1994, and were previously employed by Cameron Forged Products Company. Notwithstanding, prior to the effective date, a participant's employer account became vested in accordance with a vesting schedule then in effect. Participants entire accounts become fully vested once they have attained their normal retirement date as an employee or upon their leaving the Company due to their disability or death. R-13 26 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (i) VESTING (continued) In addition to the vesting provided above, a participant's Company Stock Match Account becomes vested in accordance with the following schedule, unless (1) their hire date is on or before April 1, 1993 and they were an employee of the Company on April 1, 1993 or (2) they were employed by WGFI on May 27, 1994, and were previously employed by Cameron Forged Products Company before that date: COMPANY STOCK MATCH ACCOUNT VESTING SCHEDULE YEARS OF VESTING SERVICE VESTED PERCENTAGE Less than 1 0% 1 but less than 2 20% 2 but less than 3 40% 3 but less than 4 60% 4 but less than 5 80% 5 or more 100% (j) WITHDRAWALS Withdrawals may only be made in accordance with the terms of the Plan. Hardship withdrawals of tax deferred contributions and related earnings are subject to approval by the Plan Administrator based upon the participant's financial need and are subject to IRS limitations. Withdrawals of after-tax contributions, rollover account withdrawals, withdrawals for participants over age 59 1/2 and withdrawals of certain Company contributions are allowed for amounts up to the extent of a participant's account balance with certain restrictions. (k) PARTICIPANT LOANS Participants may borrow, generally, up to the lesser of 50% of their total vested account balance in the Plan or $50,000 less the highest outstanding plan loan balance during the one-year period preceding the date of the new loan. The loans bear interest at market rates and are repaid in regular installments within five years. Early prepayment is allowed. R-14 27 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION (continued) (l) FORFEITURES Forfeitures of employer contributions are invested in interest bearing deposits of Merrill Lynch. Forfeiture amounts are utilized to restore accounts, pay plan fees and expenses, and to reduce the Company stock match and bonus contributions as directed by the Plan administrator. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Plan in preparation of its financial statements. The financial statements are prepared in accordance with generally accepted accounting principles. (a) USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. (b) VALUATION OF INVESTMENTS The Plan's investments are stated at fair value. The fair value of investments is generally determined as follows: * Units of Merrill Lynch collective investment funds are valued on the basis of the unit value established for each fund at each valuation date. Valuation of the funds' units occurs, at a minimum, on a monthly basis. Unit values are determined by dividing the value of the funds' net assets by the number of units outstanding on the valuation date. * Stocks and mutual funds traded on security exchanges are valued at closing market prices on the valuation date. (c) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME Security transactions are accounted for on the trade date. Interest income is accounted for on the daily accrual basis. Dividend income is recorded on the ex- dividend date. The cost of securities sold is computed on an average cost basis. R-15 28 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (d) INVESTMENT INCOME Net investment income, as earned, is allocated to participant accounts and reinvested. The Plan presents, in the Statements of Changes in Net Assets Available for Benefits, net appreciation (depreciation) of the fair value of investments which consists of the realized gains and losses and the unrealized appreciation (depreciation) on those investments. (e) PURCHASES AND REDEMPTIONS OF UNITS The value of participating units, upon admission to or withdrawal from the funds, is based upon the fair value of net assets held as of the valuation date. Upon purchase or redemption of units by a participant, transaction costs incurred for the related security transactions are borne by that participant. (f) EXPENSES Account maintenance, transaction fees and expenses and investment fund management and maintenance fees are paid by the Plan and charged to the participants accounts; all other fees are paid by the Company. (g) RECLASSIFICATIONS Where appropriate, prior year amounts have been reclassified to permit comparison. 3. PLAN LIABILITIES Merrill Lynch uses a daily valuation method whereby all account activity and related transactions take place on the same day as the day of record. Therefore, all benefit payments to participants or Plan expenses are paid from the various funds on a current basis and at December 31, 1998 and 1997, there were no accrued liabilities for the Plan. R-16 29 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 4. INVESTMENTS The fair value of individual investments that represent 5% or more of the Plan's net assets are as follows: 1998 1997 MasterWorks - Income Accumulation Fund (1,484,153 shares and 1,494,755 shares) $22,051,843 $20,877,997 Norwest Large Company Growth Fund (160,536 shares) 8,746,000 - MasterWorks - Asset Allocation Fund (1,041,670 shares and 883,602 shares) 14,729,207 11,257,089 MasterWorks - Bond Index Fund (661,760 shares and 579,223 shares) 6,624,220 5,641,628 MasterWorks - Growth Stock Fund (624,365 shares) - 9,121,968 MasterWorks - S&P 500 Stock Fund (1,184,010 shares and 1,092,467 shares) 29,138,483 22,275,400 Wyman-Gordon Stock Fund (1,105,157 shares and 764,111 shares) 16,323,173 21,815,355 5. RELATED PARTY TRANSACTIONS Certain Plan investments are units of collective investment funds managed by the MasterWorks Division of BGI, now owned by Merrill Lynch. Merrill Lynch and BGI were the trustees, as defined by the Plan, as of December 31, 1998 and 1997, respectively, and, therefore, these transactions qualify as party-in-interest. Fees paid by the Plan for the investment management services amounted to $123,153 and $138,634 for the years ended December 31, 1998 and 1997, respectively. 6. TERMINATED EMPLOYEES Net assets available for plan benefits at December 31, 1998 include $16,797,316 allocated to the accounts of persons who, as of or prior to that date, have terminated employment with the Company. R-17 30 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 7. PLAN AMENDMENTS During 1997 the Plan was amended. Among the changes were the definition of limitations on the maximum annual additions to a participant's account, designation of trustee, use of forfeitures, definition of compensation, loans in default and company contributions. 8. SUBSEQUENT EVENT On May 17, 1999, Precision Castparts Corp. and Wyman-Gordon announced that Precision Castparts Corp. has agreed to acquire 100 percent of the outstanding shares of Wyman-Gordon common stock for $20 per share. The tender offer period expires at 8:00 p.m., Eastern Time, on Friday, July 30, 1999. Following the completion of the tender offer, Wyman-Gordon will become a wholly-owned subsidary of PCC through a cash merger at the same price. The tender offer is conditioned upon the tender of at least two-thirds of the outstanding shares of Wyman-Gordon and certain other conditions, including compliance with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. R-18 31 SCHEDULE 1 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN EIN: 04-1992780 Plan #011 Line 27a - Schedule of Assets Held for Investment Purposes December 31, 1998 (c)DESCRIPTION OF INVESTMENT INCLUDING (b)IDENTITY OF MATURITY DATE, ISSUE BORROWER, RATE OF INTEREST, LESSOR OR COLLATERAL, PAR, (e)CURRENT (a) SIMILAR PARTY OR MATURITY VALUE (d)COST VALUE AIM 95,852 Shares $ 2,664,603 $ 2,925,399 AIM Constellation Fund * Merrill Lynch 1,484,153 Shares 22,051,843 22,051,843 Merrill Lynch Income Accumu- lation Fund * Merrill Lynch 92,020 Shares 1,045,773 1,071,110 MasterWorks LifePath 2000 Fund * Merrill Lynch 115,864 Shares 1,570,047 1,668,434 MasterWorks LifePath 2010 Fund * Merrill Lynch 104,538 Shares 1,600,945 1,722,786 MasterWorks LifePath 2020 Fund * Merrill Lynch 36,476 Shares 592,084 683,194 MasterWorks LifePath 2030 Fund * Merrill Lynch 72,830 Shares 1,317,069 1,480,643 MasterWorks LifePath 2040 Fund Neuberger & 103,487 Shares 1,785,841 1,672,347 Berman Neuberger & Berman Guardian Trust Fund Norwest 160,536 Shares 7,811,713 8,746,000 Norwest Large Company Growth A Fund R-19 32 SCHEDULE 1 (Continued) WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN EIN: 04-1992780 Plan #011 Line 27a - Schedule of Assets Held for Investment Purposes December 31, 1998 (c)DESCRIPTION OF INVESTMENT INCLUDING (b)IDENTITY OF MATURITY DATE, ISSUE BORROWER, RATE OF INTEREST, LESSOR OR COLLATERAL, PAR, (e)CURRENT (a) SIMILAR PARTY OR MATURITY VALUE (d)COST VALUE Templeton 98,272 Shares $ 1,020,201 $ 824,499 Templeton Foreign (I) * Merrill Lynch 1,041,670 Shares 12,699,744 14,729,207 MasterWorks Asset Allocation Fund * Merrill Lynch 661,760 Shares 6,470,661 6,624,220 MasterWorks Bond Index Fund * Merrill Lynch 1,184,010 Shares 21,196,256 29,138,483 MasterWorks S&P 500 Stock Fund * Wyman-Gordon 1,105,157 Shares 28,591,271 16,323,173 Company Wyman-Gordon Stock Fund Participant Loans 6.586% to 12.15% - 3,250,277 $110,418,051 $112,911,615 *Represents party in interest. R-19A 33 SCHEDULE 2 WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN EIN: 04-1992780 Plan #011 Line 27d - Schedule of Reportable Transactions Year Ended December 31, 1998 (b)DESCRIPTION OF ASSET (INCLUDE INTEREST RATE AND (a)IDENTIFY OF MATURITY IN CASE (C)PURCHASE (D)SELLING PARTY INVOLVED OF A LOAN) PRICE PRICE Merrill Lynch Merrill Lynch - Income $13,843,776 $13,989,376 Accumulation Fund Merrill Lynch Norwest Large Company 15,687,572 7,708,341 Growth A Fund Merrill Lynch MasterWorks - Asset 5,409,121 3,190,443 Allocation Fund Merrill Lynch MasterWorks - Growth 3,650,105 11,015,015 Stock Fund Merrill Lynch MasterWorks - S&P 500 9,708,948 7,427,839 Stock Fund Wyman-Gordon Wyman-Gordon Stock Fund 18,640,246 12,556,248 Company R-20 34 SCHEDULE 2 (Continued) WYMAN-GORDON COMPANY SAVINGS/INVESTMENT PLAN EIN: 04-1992780 Plan #011 Line 27d - Schedule of Reportable Transactions Year Ended December 31, 1998 (f)EXPENSE (h)CURRENT INCURRED VALUE OF WITH ASSET ON (E)LEASE TRANS- (g)COST TRANSACTION (i)NET GAIN RENTAL ACTION OF ASSET DATE OR (LOSS) - - $13,989,376 $13,989,376 $ - - - 7,875,859 7,708,341 (167,518) - - 2,682,897 3,190,443 507,546 - - 12,548,695 11,015,015 (1,533,680) - - 5,514,915 7,427,839 1,912,924 - - 14,289,996 12,556,248 (1,733,748) R-20A